Inflation falls below 2%
The CPI inflation rate in January 2019 was 1.8%, the first time that inflation has been below the Bank of England’s inflation target of 2% since January 2017.
The inflation rate gradually slowed throughout 2018, down from 3.0% in January 2018. The MPC forecasts that inflation will remain around 2% in 2019.
In contrast, average pay growth continued to accelerate, with a 3.4% increase in average earnings in the final quarter of 2018. Real (inflation adjusted) average earnings growth rose to 1.1% in this quarter. The last time growth was above 1% was back in 2016.
For much of 2018 average earnings have grown at a faster rate than inflation.
Read Full News Story » UK Economic Indicators January 2019